CBN to allow cash transfer via wireless carriers

The Central Bank of Nigeria is preparing rules that will allow wireless carriers to transfer cash, softening a previous policy that protected the turf of banks in the country.

Telecommunications firms, including MTN Group Limited, are now interested in applying for licences that would allow them to create units that can collect deposits and maintain savings accounts, Bloomberg reported.

It said the CBN might have realised it couldn't rely on lenders alone to achieve its objective of extending services to the 50 million adults still without bank accounts in the nation of about 200 million people.

Telecommunications firms are now interested in applying for licences that will allow them, and even supermarket chains, to create units that can collect deposits and maintain savings accounts.

The CBN, late last year, released guidelines on how payment service banks would operate to reverse a drop in access to affordable financial products.

It had previously blocked network operators from getting licences to move money for customers without using a bank. But, with 162 million active lines between the nation's four wireless carriers, the regulator is opening up the field in a bid to more than double its financial inclusion rate to 80 per cent by 2020.

The Chief Executive Officer, Financial Derivatives Company, Bismarck Rewane, in an interview with Bloomberg, said, "These guys are going to grab all the bottom-of-the-pyramid transactions. This is a disruptor to the traditional way of doing things."

Bloomberg said banks, however, still had some shelter from full-blown competition as the new policy would not enable licencees to lend, pay interest or accept foreign-currency deposits.

It said the new policy also required that at least one quarter of access points be located in rural areas, which are currently under-served.

The General Manager, mobile-financial services, MTN Nigeria, Anthony Usoro, described the initiative as a first step towards bringing all players in.

"We expect that the CBN will keep listening to customers, to potential participants in that space and will keep improving the policy," Usoro stated.

The CBN did not respond to requests for comment about the new policy or when the licences would be granted, Bloomberg said.